Poor visitor data leaves regional tourism 'flying blind'

Thursday, 29 November 2018

Lack of information about domestic and international  visitors is handicapping regions seeking a bigger slice of the tourism pie.

Bay of Plenty Tourism's 'data shopping' bill will run to $150,000 this year - that's how much chief executive Kristin Dunne has budgeted to nail down basic information on visitors to woo would-be investors in the tourism sector.

The Government's recently released draft tourism strategy is based heavily around sending more visitors into lesser known places to relieve the pressure on popular locations such as Queenstown and create jobs in the regions. 

However, investors want hard facts about future prospects before committing to building new attractions and accommodation.

*** Damning review of tourism spending data leads to change

* Tourism industry demands better quality data and more research funding

* Lack of critical visitor data puts the tourism industry at risk

* Hotel oversupply looming warns Horwath**

Nationally, Dunne says we know quite a lot about the 3.7 million tourists who came here last year.

But at a regional level she says the data is woefully inadequate for running a multi-billion dollar industry and properly evaluating business cases for the myriad of tourism projects seeking money from the $1 billion a year provincial growth fund (PGF).

'It's impossible to plan. We don't know what visitor satisfaction is like. We understand spend, but we have no idea of volumes.

'I'm looking at PGF applications with really exciting potential, but how do we predict how many people might be coming here to use them?

'Investors ask, 'how do you not know how many people are here?' They keep ringing me saying 'you must have data,' and I'm saying 'I'm sorry we just do not.''

Rather than making 'heart' and 'gut' decisions, Dunne commissioned private research company Fresh Info and Colliers hotel division to find the information she needs.

Tourism industry flying blind

Fresh Info has about half the country's 30 regional tourism organisations on its books and managing director Shane Vuletich​ says it's unfortunate only those who can afford to pay get the required data.

He says provincial growth fund decisions on tourism projects are being made on the basis of 'educated guesses' but the private sector won't commit without a strong business case.

'They're not going to fly blind and take a punt on a $40 million hotel in Tauranga without hard data.

'If the Government is serious about investment it has to get serious about the data required to inform these business cases.'

Vuletich's​ other beef is that international  tourist spend ($14.5b last year) is overstated by at least $1b a year because it includes sizeable commissions paid to overseas travel companies and online booking channels. 

'When a Chinese tour group makes a booking through a Chinese travel agent, which happens all the time, they will put a sticker price on it, but their margins will be 20 to 30 per cent, so what the consumer pays doesn't look anything like what New Zealand receives.'

The commercial accommodation monitor produced by Statistics NZ is another sore point.  

National director of Colliers hotel division Dean Humphries places 'virtually no reliability at all' on the figures which cover occupancy of hotels, motels, backpacker hostels and camping grounds.

They don't cover the burgeoning peer-to-peer sector of Airbnb and holiday home bookings which he says appear to have soaked up a lot of the extra million visitor arrivals over the past five years.

Humphries says that once you get away from the 'big five' – Auckland, Rotorua, Wellington, Christchurch and Queenstown – there are big holes in available tourist information.

'Investors need to understand what sort of occupancy and room rates they might achieve, what sort of people are going to want to stay there, what's the mix of domestic and international, is there demand of business travellers) or conferencing?

'We need more robust research to make proper decisions, or else we'll find – and it's happened in the past – people do developments that fail, and we don't want that.

'On the other side there are regions that really need more hotels and they're not getting them because we don't have enough data.'

Mind the gaps

When Dunne voiced her frustrations about the data drought at a recent tourism industry summit in Wellington, the 300-strong audience burst into spontaneous applause.

If the tourist boom of the last few years caught New Zealand with its pants down it was in part because we didn't see it coming.

Tourism Industry Association chief executive Chris Roberts says accurately predicting future trends is important 'so we're not reacting to what's already happened, we're getting ready for what's going to happen.'

In July the Ministry of Business Innovation and Employment (MBIE) took a caning in a Statistics NZ review of the international visitor survey which revealed failings in the gathering of official spending figures.

Since then there's been an overhaul of the Tourism Domain Plan – a blue print prioritising future tourism data – and getting better regional information tops a list of 29 priorities.

Roberts welcomes that, and the acknowledgement that the compete lack of official figures on domestic travellers is a major gap.

'People are surprised that we know less about the domestic visitor than we do about the international visitor.

'Where should regions be putting their effort when they don't know which segment of what's a very large visitor market to target to get their best value for money?'

The domain plan also noted that five years ago the international visitor survey stopped gathering detailed information of visitor itineraries.

While the survey could be used to estimate overseas visitor volumes at specific locations, such as national parks, the information was 'subject to high levels of sample error' and was 'not fit-for-purpose, ' so new data sources were needed to track tourist flows.

Roberts says that while the plan says all the right things, it's a 'wish list' without any clear undertakings on when the work will occur, and he hopes income from the new $35 a head international visitor levy will help fund long overdue research.

Filling the info holes

Dr Antony Kennedy is three months into a job managing MBIE's tourism data collection and he says the domain plan work will kick off in June if funding is forthcoming, which he believes it will be.

He says tracking visitor cell phone, app and credit card use could improve the reliability of data.

'Unfortunately there's no requirement for tourists to register their presence in every place they go to when they come to New Zealand.'

There have been talks with Statistics NZ about capturing numbers from the likes of Airbnb and other similar accommodation providers.

Kennedy admits that getting accurate statistics on freedom camping is problematic because they are extrapolated from such a small international visitor survey sample, and tapping sources such as the CamperMate app might provide a better handle on this group of travellers.

He says MBIE has sorted issues with the level and mix of responses to the survey.

It became an online survey in 2015, but whether it reverts to the former practice of face-to-face interviews done in airport departure lounges remains to be seen. 

'We're exploring every option open to us, nothing is closed,' Kennedy says.

Despite these assurances, Dunne still worries about the any delay in improving data, and the risk of a piecemeal approach if regions that can't wait end up doing their own thing.

'We have no idea when [MBIE] will be delivering … we don't have 10 years to muck around.'